A POD account lets money pass directly to a named person when you die, without going through your will or probate
POD stands for "Payable on Death." It is a way to name someone to receive the money in a bank account automatically when you pass away. The person you name — called the beneficiary — gets the account balance without waiting for a will to be read or a court to process your estate. The money goes directly to them.
You keep full control of the account while you are alive. You can spend the money, close the account, or change who the beneficiary is at any time. The beneficiary has no claim to the money until you die. POD is one of the simplest ways to make sure someone you choose receives your savings.
Key Takeaways
- A POD account names a beneficiary who receives the full balance when you die, outside of your will or probate court.
- You keep complete control of the account during your lifetime and can change the beneficiary or close the account whenever you want.
- The beneficiary cannot touch the money until you die, and they do not need to know about the account beforehand.
- Most banks offer POD at no extra cost, and you can set it up when you open an account or add it to an existing one.
- POD works only for bank accounts; other assets like a house or car need different legal tools to pass to someone after death.
How POD works when you die
When you pass away, your family or the executor of your estate (the person handling your affairs) tells the bank. You provide the bank with a death certificate. The bank then releases the full account balance to the beneficiary you named — no court involvement needed.
This process is much faster than probate, which is the court process that normally handles who gets your money and property. Probate can take months or even years. With a POD account, the beneficiary can often receive the money within weeks. The money does not become part of your estate, so it does not go through probate at all.
Setting up a POD account at your bank
Most banks let you add a POD beneficiary when you open a checking or savings account. You straightforward tell the bank who you want the money to go to — usually by their full name and Social Security number. Some banks call this a "Transfer on Death" or TOD account, but it works the same way.
If you already have an account, you can usually add a POD beneficiary by visiting your bank in person, calling them, or using their online banking system. There is no cost to set this up. The bank will give you a form to sign that names your beneficiary. Keep a copy for your records.
Who you can name as a beneficiary
You can name almost anyone as a POD beneficiary — a spouse, child, parent, friend, or even a charity. You can also name more than one person. If you name multiple beneficiaries, the bank will split the account balance equally among them when you die, unless you tell the bank a different split.
The person you name does not have to know about it beforehand. You do not need their permission to list them as a beneficiary. However, it is usually a good idea to tell them, so they know to contact the bank after you die.
Changing or removing a POD beneficiary
You can change your beneficiary at any time while you are alive. straightforward contact your bank and ask to update the POD designation. The bank will give you a new form to sign. The old beneficiary has no say in this — you have complete control.
If you want to remove the POD designation entirely, you can do that too. The account will then pass through your will or to your heirs under your state's laws. Make sure you understand what will happen to the money before you remove the POD.
POD accounts and taxes
The money in a POD account is still part of your taxable estate for federal estate tax purposes, even though it does not go through probate. This matters only if your total assets are very large — the federal estate tax applies only to estates worth more than a certain amount, which varies by year. Most people do not have to worry about this.
The beneficiary does not pay income tax on the money they receive from a POD account. They receive it tax-free. However, if the account earns interest before you die, that interest may be taxable to you in the year it is earned.
POD accounts versus other ways to pass money to someone
POD is one tool among several. A joint account with someone means they can access the money while you are alive, which POD does not allow. A trust is more complex but gives you more control over how and when the beneficiary receives the money. A will lets you name who gets your money, but it goes through probate court, which takes longer.
POD is the simplest option if you want someone to receive your savings quickly and without court involvement, and you do not need them to have access to the money while you are alive. If you have a large estate, multiple accounts, or want to set conditions on how the money is used, you may want to talk to a lawyer about a trust or will instead.
Frequently Asked Questions
Can I name my minor child as a POD beneficiary?
Yes, but the money cannot go directly to them because they cannot legally manage it. The bank will hold the funds until they reach the age of majority (usually 18 or 21, depending on your state), or a court may appoint a guardian to manage it. You may want to set up a trust instead if you want more control over how the money is used for your child.
What happens if my POD beneficiary dies before I do?
The money does not automatically go to their heirs. Instead, it becomes part of your estate and is distributed according to your will or your state's laws. You should update your POD beneficiary if the person you named dies, or name a backup beneficiary if your bank allows it.
Does a POD account protect money from creditors?
In most states, a POD account is protected from your creditors after you die — the money goes directly to the beneficiary. However, the rules vary by state. If you have significant debts, talk to a lawyer about how POD accounts are treated in your state.
Can my spouse claim my POD account in a divorce?
It depends on your state's laws and whether the account was opened during the marriage. In some states, money in a POD account opened during marriage is considered marital property and can be divided. In others, it is not. If you are going through a divorce, tell your lawyer about any POD accounts you have.
Is a POD account the same as a beneficiary account?
POD is one type of beneficiary account. Some banks use "beneficiary account" as a general term for any account where you name someone to receive the money after death. Always ask your bank exactly what they mean to make sure you understand how the account works.